Longtime manufactured housing industry veterans Jeff Farren, Jack Frisby, and George Allen have combined efforts to provide insight on the different ways in which investors go about putting their efforts into communities.
The three have a deep background in community syndication, as well as independent ownership, and provide in the recent white paper “How to Evaluate a Mobile Home Park Investment Opportunity” provide an overview of the business, as well as varying strategic options for investment.
“Investment in land lease communities is really a hybrid of a pure real estate investment and investment in an operating business,” the authors state. “It is certainly not like investing in triple net leases (aka “mailbox money”), or even retail or industrial real estate where the primary variable is the ability to sell and lease sites. Mobile Home Park investment requires a unique skill set that is usually acquired through years of experience in the asset class. But every expert was once a novice.”
So let’s begin the education!
In laying out the paths to manufactured housing community investment, Farren, Frisby, and Allen cover what they call The Five Ps: Preparation, Prospecting, Pricing, Purchase, and Profit Maximization
In covering the preparation part alone, the authors ask the reader no fewer than 40 questions to be considered when determining interest and intent for manufactured home community investment.
“Do you have a desire to make an impact on people with your investments or are you purely focused on return?” the paper asks. “A land lease community provides pride of ownership to lower-income Americans. Does that matter to you? Should the social impact of providing affordable housing to hard-working Americans be a part of a sound investment evaluation?”
The section on Prospecting becomes a tactical checklist, if you will, that can guide a potential investor through the route of syndication, individual ownership, or small group ownership. Pricing provides a model for how would-be owners and investors can evaluate a piece of property, and make a quality determination of value.
“Be patient. Negotiate. Be prepared to walk away,” the authors wrote in the illustrated 15-page paper that can be found at www.veroinvestments.com. “The act of making a purchase of this magnitude is an emotional experience. Recognize your emotions and examine them to be sure they are serving you and not sabotaging you.”
The paper finishes with a list of mechanisms that provide added revenue for manufactured home communities, as well as a list of ways to responsibly reduce cost while maintaining high-quality communities.
About the White Paper Authors
Jeff Farren and Jack Frisby are principals of Vero Investments, LLC. Vero Investments is a sponsor of group investments aka real estate syndications in the land lease community asset class. Farren has over 30 years of experience in ownership and management of land lease communities. He also is a successful business owner and adviser to other owners of small businesses. He is a Certified Merger and Acquisition Advisor, and holds an MBA from the University of Chicago. Frisby is a well-known business consultant, educator, and mentor to Christian business leaders. He leads roundtable groups of business owners and executives, focused on merging their professional and spiritual lives. He earned a BA in Human Relations and a MA from Northern Seminary.
George Allen is a preeminent industry leader and the most well-known and prolific author on the topic of land lease communities. Now retired, Allen has been a successful community owner, manager, and consultant through several companies he founded, including GFA Management, Inc. and EducateMHC. He continues to serve the associate editor for MHInsider and contributes the Allen Legacy column to its readers.
MHInsider is the leader in manufactured housing news, and is a product of MHVillage, the largest marketplace for manufactured homes.
